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Breakfast Brief – 6 October 2009

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France calls on Prague not to block Lisbon
Pierre Lellouche, France’s secretary of state for European affairs, yesterday called on Prague and London not to impede the Lisbon Treaty for reforming the European Union. Prague should stop with delaying ratification of the treaty, Lellouche said during a debate with ambassadors, parliament members and journalists. A poll by SANEP showed that 43% of Czechs think President Václav Klaus should sign the treaty without delay.
Source: LN 1, 6, ČTK

Klaus: Lisbon not necessary for EU enlargement
The statement that passing the Lisbon Treaty would be needed before further enlargement of the European Union is a hoax spread by Brussels and by some European politicians, Czech President Václav Klaus said yesterday after meeting with his Albanian counterpart, Bamir Topi. Adding new members into the EU is possible under existing agreements, Klaus said.
Source: ČTK

Party leaders to meet Friday on cabinet’s future
Prime Minister Jan Fischer has invited the leaders of parties who supported Finance Minister Eduard Janota’s austerity package to a meeting on Friday to discuss the cabinet’s mandate until the 2010 elections, Fischer said yesterday.
Source: most Czech press

Senate approves 4% wage cut
The Senate yesterday approved a 4% wage reduction for top state officials next year, but rejected a measure proposed by the lower house that would tax reimbursements for the President, cabinet members, lawmakers and judges, saying such a bill would be difficult to apply.
Source: most Czech press

Senate passes govt austerity package
The upper house yesterday approved a government-backed package aimed at reducing next year’s budget deficit from CZK 230 billion to CZK 163 billion. The bill must now be signed by the President.
Source: E15 3, Právo 2

Plzeň law faculty faces another scandal
Vladimíra Dvořáková, the head of a committee looking into practices at the law faculty in Plzeň, said some students at the school had received an MA after just two months study and that hundreds of others received diplomas in under five years. The names were not published but allegedly include influential lawyers and politicians. This is the second scandal in recent months after it was determined some students had plagiarised their dissertations.
Source: HN 1, 5

Soukenická collapse involved unauthorized construction
An investigation into the collapse of a house on Soukenická street in central Prague Friday determined the contractor, Sting Praha, was carrying out work it did not have a permit for. Sting owner Daniel Rada over the weekend denied any wrongdoing, but Prague 1 Mayor Petr Hejma said he would push to fine the company millions of crowns. Four workers died in the collapse.
Source: most Czech press

Paroubek: ČSSD would not support second austerity package
ČSSD chairman Jiří Paroubek said his party would not support a possible second package of austerity measures for 2011 and the years to follow that Finance Minister Eduard Janota has suggested might be needed. Paroubek said such a package would harm ordinary people.
Source: HN 1, 2, ČTK

UN: ČR ‘second best’ of post-communist countries
The United Nations’ recent Human Development Report placed the Czech Republic 36th out of 182 countries based on overall quality of life. That makes the country second-best of the former-communist countries, preceded only by Slovenia. Slovakia was ranked 42nd. The list was headed by Norway, followed by Australia and Iceland.
Source: LN 3

ČSA proposing wage cuts
The new supervisory board chairman for Czech Airlines (ČSA), Václav Novák, has proposed reducing pilots’ wages by 45% and cancelling benefits and limits on work time as part of a plan to restructure the carrier. Stewardesses could see a 25% cut in wages; others could lose 15%. The company has already laid off 400 people; around 30 pilots have left with a 12-month severance package.
Source: most Czech press

Tůma threatens ČNB intervention against strong crown
ČNB Governor Zdeněk Tůma told Reuters yesterday the bank’s board considered intervening against the strong crown at its last meeting on 24 September. The crown dropped by CZK 0.10 against the euro after the statement. UniCredit Bank analyst Pavel Sobíšek said the crown will either continue to weaken on the comments or the Czech National Bank will decide to lower the interest rate at its next meeting in November. The current interest rate is 1.25%; cutting this to 1% would bring it into line with euro rates.
Source: HN 23, E15 1, 13

TA Associates buys minority stake in AVG
The American investment company TA Associates has purchased around a 25% stake in the Czech antivirus firm AVG Technologies for USD 200 million, TA said in a press release yesterday. The transaction is the biggest involving a private investment fund in central and eastern Europe so far this year.
Source: most Czech press

Controversial tender could be finished in weeks
The cabinet yesterday appointed a committee to decide the winner of a giant and controversial state-funded project to clean up environmental damage caused during the communist period worth CZK 115 billion. Three companies are still in the running: Geosan Group, Marius Pedersen Engineering and Environmental Services. They have until 13 October to submit bids. Three companies that were eliminated from consideration have appealed to the antimonopoly office. The Czech Environmental Inspectorate estimates the true value of environmental damage at just CZK 30 billion-40 billion.
Source: HN 15, MfD A1, A10

HN: Banks caution against pre-purchases of ČSA tickets
Following the recent collapse of SkyEurope, which left companies like Visa and MasterCard having to return money to clients for cancelled flights, businesses that issue credit cards are planning to transfer money for Czech Airlines’ tickets only after flights take place, Hospodářské noviny reports. ČSA’s supervisory board will meet tomorrow to discuss the issue.
Source: HN 1, 17

Association: Czech banks among world’s most stable
Czech banks have proven to be among the most stable in Europe and around the world during the global recession, according to a Czech Banking Association evaluation of developments over the past year.
Source:, Aktuálně.cz

J&T Banka targets smaller clients
J&T Banka has raised its deposit rates to 4% for deposits under CZK 500,000 for a year and 4.5% for two years in a bid to lure smaller customers. CEO Štěpán Ašer told HN the higher rates should attract additional deposits of around CZK 2-3 billion by the end of 2010.
Source: most Czech press

Investment in commercial properties drops 88%
Investment in office buildings, commercial centres, warehouses and hotels in the Czech Republic fell 88% on the year to EUR 125 million during the first three quarters, consulting company CB Richard Ellis said in a press release.
Source: ČTK

Czechs to spend CZK 101bn for IT this year
Czech firms will spend CZK 101 billion on information technologies this year, 5% more than last year. By 2013, Czech IT expenditures will increase at a rate of 6.3% a year, while GDP will grow by just 1.5%, according to the analytical firm IDC in a study for software giant Microsoft.
Source: HN 19, ČTK

Jet2 to launch Prague-Manchester flights
British low-cost airline Jet2 will fly from Prague to Manchester four times a week starting in April, Prague Airport spokeswoman Eva Krejčí said. Czech Airlines will end its Manchester flights at the end of October.
Source: ČTK

Tatra Kopřivnice to shed 530 jobs, reduce working hours
Lorry-maker Tatra Kopřivnice will dismiss 530 employees in October owing to a shortage of orders and cut the work week to four days as of November, Czech Television reported yesterday. The company is looking to reduce total employment to 2,200 workers by the end of the year.
Source: ČTK

Sazka seeks end to anonymous gambling
Sazka, the country’s largest betting company, has proposed to the Finance Ministry to install ID readers in gambling machines for greater transparency. A spokeswoman for the Office for Personal Data Protection, Hana Štěpánková, said the office would not favour the measure but would accept it if it became law. Changes to the gaming laws are due to be discussed in the coming weeks.
Source: LN 1, 2

Farmers cut milk output due to falling prices
A survey by the Agrarian Chamber showed that since the end of last year 164 out of 1,643 farmers polled have stopped breeding milk cows and some 323 farmers have reduced milk production owing to low purchase prices for milk.
Source: ČTK

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